Wednesday, August 2, 2023

First Break and a counterpoint on Fixed-costs

Quicksilver will be heading into town to get her one-year vaccinations/boosters. Between that and cutting her first molar she will be an unhappy girl. She is now 14 months-old.

Mrs ERJ is letting me take a slightly longer breaks today (YEAH!!!!).

Overhead aka, fixed-costs

I hate fixed costs. They are evil.

My friend, Jim, the farmer from Nebraska tells me that I have my perspective screwed up. From his perspective, high fixed-costs are what force improvement and reduce waste. His reasoning follows:

"I get pissed off at people who hate modern agriculture. They contend it is inherently evil (sinful) because it is so wasteful.

They have a very shallow understanding of how agriculture works. They run on emotion rather than logic and economics.

Take ethanol production, for instance:

Essentially, the fermentation process strips the carbs out of the grain and leaves the protein and fats. In fact, what comes out of the process can be MORE protein than what was put in and it can have a better balance of essential amino acids and vitamins.

Yeast can take urea (ammonia + carbon dioxide) and convert it to protein. That is how more protein can come out than goes in...if the master of the grain-bill adds urea at the start of the fermentation to accelerate the process. And why would he do that? Because those facilities cost money regardless of how much throughput they achieve. More production in a shorter time amortizes the fixed costs over more product.

Because ethanol is a commodity, there might not be much profit in it. The profit margin can get a huge boost if they sell the PROTEIN left after the fermentation to egg production facilities, broiler barns and hog facilities.

Humans crave protein and fats. Ethanol production is not a stand-alone enterprise. It consumes carbs (which are in oversupply) and improve the efficiency of protein production...the kinds of protein that the market craves.

Modern agriculture chase after pennies because they have a huge overhang of fixed-costs if they do not sell every output. That drives incredible efficiency. What a home-gardener would see as waste and pay to have hauled away, modern agriculture finds a way to squeeze a little more use out of it.

That is why over-head (i.e. fixed-costs) are "good", because it drives efficiency."


11 comments:

  1. I cry for your granddaughter. Everything big pharma tells you is a lie. (And they own medicine lock, stock and barrel.)

    Good luck

    ReplyDelete
    Replies
    1. Ya know, I was trying to come up with a tactful way to broach the topic.
      I decided ultimately it is likely the mother and fathers decision, so...
      But I contemplated the same the other day... would I advocate to my children to skip vaccines for theirs? I do have a child with ADHD and we both swear it kicked in after the one set of shots. His whole personality changed...

      Delete
  2. Tha majority of vaccines given to peds patients now are NOT medically necessary.

    ReplyDelete
  3. I'm 62 years old, 21 of those years spent in the military. I'm about as vaccinated as a man can be! That being said, after what happened with COVID, I truly DO question vaccines now! One of my friends on the ham radio almost lost his arm due to a blood clot from the "vaccine." This determination was made by his primary doctor, a cardiologist, and a hematologist. That shit isn't going into THIS bag of bones!!!

    As for farming being "wasteful," anyone who even pursues subsistence GARDENING and livestock husbandry will tell you it's ALL about getting MORE while using and spending LESS!!! I live in the Pacific Desert Southwest. The downside is... IT'S HOT here in the summer. The upside is that the soil is really good here. It's always a tightwire act to get as much as you can out of the ground while using as little water as possible! Same goes for the critters. Again, IT'S HOT here, so I hung a swamp cooler in the chicken coop. Yeah, it uses water and electricity, but I want my hens to LIVE. I want them to PRODUCE EGGS. How do I balance this out? Well, the hens free range during the latter part of the day. They love their freedom more than air conditioning, so aside from the thermostatic outlet switch on the cooler, there's a remotely programmable and accessible switch on the outlet. The switch is programmed to shut off the cooler during the time the hens free range. It turns on again around the time they start heading beck to the coop in the evening. Both water and power are saved. There's also runoff from the swamp cooler. This is captured by a 55-gallon tank on a garden trailer during the day. In the evening I hook the trailer up to Fury, the evil, ancient golf cart, and do supplemental watering of my fruit trees. The water also refills watering stations I have set up around the corral for the hens. 55 gallons of water, already paid for, gets a second life.

    Green waste, both from the kitchen and the garden, gets offered to the hens on the compost heap. What the hens don't eat, along with their poop, gets composted and returned to the garden bed. The bigger stuff gets used as mulch. Very little ends up in the "green waste" can for pickup.

    What I tend to notice is that many of the people who criticize farmers are some of the most wasteful people on Earth! Better they work at taking the logs out of their own eyes before telling me about the speck of dust in mine!!! Y'ear that, Mr. Kerry???

    ReplyDelete
  4. We are young parents and were in the MIDDLE of doing a reduced vaxxx schedule (planned only to give our kids the same schedule as it existed in the 1980s) WHEN the whole covid psyop was unleashed on the world.

    After years of careful research and more than just a couple of hushed tone conversations with doctors that were as appalled as we were at what was happening: We are done. No more. Zilch. Zero. Nada.

    ReplyDelete
    Replies
    1. I'm with you.
      The problem for the parents of the child is you will be unable to participate in any public schooling. Some people see this as a side effect, some see it as a benefit.. My daughter was required to submit her vaccination records to college before she could start classes. The kungFlu is not on the list (yet).

      Delete
    2. I went to college in '78. I remember HS transcripts and Money. That's all they wanted or needed.

      Delete
  5. Sort of like Iceland's "Fish 100" program. They want to use 100% of everything from the fish they catch. They used to use 40%, now they are up to 95$%. https://hakaimagazine.com/news/icelands-quest-to-use-100-percent-of-its-fish-waste/

    ReplyDelete
  6. Tropicana was the first, as far as I know, to use ALL of the orange parts for 'something'. They literally have zero waste, except for the smell, because that floats away...

    ReplyDelete
  7. I'm just short of scorn wrt farmers justifying ethanol....so I settle for derision.
    30%-35% of US corn is bound for the ethanol plant. Why does said 35% guaranteed sales outlet exist?
    Because 1992 DNC primary season and His Wretchedness Wm J Clinton told gathering of Iowa Corn Growers Ass(oc) he would extend the fed govt mandate of fuel ethanol. Corn Growers Ass(oc) is a powerful (& wealthy) player in Iowa politics.
    But His Wretchedness was VERY familiar with ins/outs of agriculture lobby. Remember Hillcats stupendous first timer's luck with the cattle futures mkt payoff? I remember that 6 figure miracle bet.

    "Free mkt" farmers and ethanol.....pfft!
    Hope they get blight.....wait, it won't matter their crop insurance is federally subsidized, remember??

    ReplyDelete
  8. Back in the 70’s and 80’s when I was in dairy some dairy feeds contained urea as a protein booster. We didn’t use them but we did use a product called molemix lightly as a top dressing for hay to encourage eating more. We would have used molasses but it was no longer available. The dried distillers grains were part of the feed we fed because it works as pass through protein. Most feed going in a cow is processed in the rumen. The bacteria in the rumen turn forage etc into useable nutrients and this is where urea is turned into amino acids. The amino acids that come out of the rumen are somewhat limiting but pass through protein can be digested in the other three stomachs so it boosts the amount of protein available to male milk. I follow a large Jersey dairy farmer on face book. I think he is under honest farmer. He is feeding a complete ration to his 1000 cows instead of separate grain, silage and hay that was common in the old days and he often shows the bays in his mixing barn with the different byproducts he adds to the feed at the recommendation of a nutritionist and availability!

    ReplyDelete

Readers who are willing to comment make this a better blog. Civil dialog is a valuable thing.